I was given a the 8gb YP-Z3 mp3 player for Xmas, the problem im having is the battery life. I'm getting about 3 1/2 hours from it, its advertised as up to 30 hours.

I've upgraded it to firmware 1.20, put backlight on the dimmest, I have the mp3's at 192 kbps. I did a test on it the other day, I just left it to play without even touching it and it was about 3 1/2 hours until it went dead from a full charge.

Indeed, battery life is very bad on this player.
But 3hrs sounds very little to me. I personally benchmarked 8-9hrs with MP3 VBR V0 files, more demanding files than yours. So you may have a battery defect.

I've been fighting against the R&D for several months now (I bought it the day of its release end of August) and I don't give up.

At first they told me it's normal there is such a difference between their benchmark with 128kbps file and mine with VBR V0 files then they later acknowledged there is an issue but they claimed it's unfortuntaley impossible for them to improve the battery life with high bitrate files without decreasing the system stability and performances. Thus they just updated the user manual from:
to

And big surprise end of december, they released a new firmware 1.21 supposed to improve battery life with high bitrate mp3 files (more than 200kbps) while they told me for 3 months that they could not improve it....But big joke: the sound with VBR files is now completely disturbed.
I don't know what they'll do now: either they'll simply come back to fw 1.20 or they'll find a way to improve the battery life without fucking up the VBR playback or.... still another big joke I can't even imagine ? Probably...

So to sum up: 3,5hrs is not normal, but even if it was normal, you would get much less than the announced 30hrs.
If you have the opportunity to get another player...